Norwegian funds see net NOK25bn invested through 2011

Figures from the Norwegian Fund and Asset Management Association (Verdipapirfondenes forening)show that a net NOK25bn (€3.25bn) was invested domestically in securities funds through 2011.

Instititional investors accounted for NOK17.3bn of the net total invested through the year. Private investors accounted for NOK6.4bn, and foreign investors NOK1.7bn.

Despite the net increase, the value of all funds under management fell, primarily becauase of the reduction in equity values. Total funds under management dropped from NOK499bn at the start of the year to NOK494bn by the end of December.

Lasse Ruud, managing director of VFF, and a member of the EFAMA board of directors, said that the ongoing economic uncertainty and the lack of a risk premium paid by the global equity market since the turn of the Century made many wary of the this type of asset.

However, he added that it was important for investors to maintain their investments during periods of poor stock market performance, and not wait until optimism returns and share prices have gained.

“For those of us with long term savings the key question is where the stock market will be in 2020, or for that matter in 2030, not what the mood is today,” he said.

Net investment by asset class 2011

NOK bn

Equity funds

-2.7

Mixed funds

1.3

Bond funds

18.6

Money Market funds

6.2

Other fixed income

1.3

Net investments

NOK bn

2003

19

2004

20

2005

54

2006

32

2007

58

2008

-24

2009

58

2010

41

2011

25

Total assets under management

NOK bn

2003

147

2004

181

2005

274

2006

343

2007

410

2008

292

2009

415

2010

499

2011

494

Source:VFF

Norwegian private investors have NOK149bn under management in funds according to the Association’s data. Some NOK90bn of that is in equity.

Institutional investors have NOK267bn under management. Foreign investors have NOK69bn under management, according to the figures to the end of 2011.

Foreign investors are predominantly equity investors, with 92% of their assets in equity.

Ruud said that since 2000, the Oslo stock market made an average annual return of 8%.

For those still in two minds about whether to invest in the market, he presented figures for the period 1900-2011. During that period local equity beat local government bonds over 5-year rolling periods 67% of the time, over 10-year rolling periods 77% of the time, and over 15-year rolling periods 82% of the time.

Equity investments should be done in mind of longer time horizons of five years or more, rather than paying heed to developments over a few months or years, he added.